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Condo Developer Transitions - Who's In Control?


Property Management Companies form crucial relationships with Developers and Builders. These relationships are nurtured and perfected while the Communities under development are managed by an Association Manager within the Company.

In the first stage of development, the Common Areas are established. The Manager has typically been through the bid process for the Contractors who are now maintaining the Community Common Areas. The parcel of land that was dirt and sod is turning into a Community, or better yet a Home Owners Association. This is the time the Manager MUST begin making contacts, and nurturing the homeowners who have purchased homes.

The first stage of the relationship with an owner is the most important. The day to day functions have been on auto run, because the Association Manager is the only responsible party to the Developer. The relationship between the Homeowners and the Developer must be established, so the Association Manager can properly represent owners within the community.

This leads to the second stage of development, when the Community is nearing the half way mark of being built out: the relationship with owners in the community is implemented. All Associations are required to have an Annual Meeting, during the second stage of development and relationship building. This is the venue where the Homeowners and Developer begin their journey as a team. There are now three parties involved - - - Developer, Association Manager, and Homeowners.
It is imperative that a Shadow Board be established at the Annual Meeting in order for a community to successfully transition into the control of homeowners. A Shadow Board is established to guide the Association Manager in the direction desired by the owners whom have invested their hard earned money in what is considered one of their most valuable assets, their home.

The Manager then enters into stage three of the relationship with the Developer and Shadow Board. During this time, the Shadow Board becomes more involved in the decision making processes. Changes to contracts, additions to the community, budgets, and Committee Development are some areas where Shadow Boards should be asked to contribute. The Association Manager will develop and nurture the relationship with owners and act to see that their vision for the community is being fulfilled while the Developer is still in control of the final decisions for the community and finalizing build out of the Home Owners Association. The Community is finally built out, and the call for a Transition Meeting is made.

The Transition Meeting is where the Developer releases control to the homeowners. Transition often releases the Developer from all financial obligations for the community and places ALL obligations set in the Declarations & Bylaws for the community in the hands of owners who have representatives elected as the first official Board of Directors.
Establishing a Shadow Board prior to Transition is what began the client retention process. A Shadow Board is the voice of the people. During the reign of the Shadow Board, just a few issues such as building defects, drainage, under developed common areas, dues increases, plus many more items can be discussed between the Developer, Association Manager, and the Shadow Board where mutual agreements can be reached. After Transition, the Developer exits the Community with happy home owners, and the Property Management Company has successfully retained the account. The Shadow Board is the catalyst for a wonderful and lasting relationship between all interested parties. The Developer, Association Manager, and Home Owners are all responsible parties in a successful and smooth transition.

Source: Association Times

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